OVIX PROTOCOL: REDEFINING LENDING AND BORROWING ON POLYGON
Introduction
Lending and Borrowing is a concept existing for many years now and is practised in Decentralized Finance and traditional financial institutions. One of the significant features of lending and borrowing in traditional finance is the presence of third parties acting as intermediaries between lenders and borrowers. Another key feature is that it often involves a trip to the bank or several meetings with a financial advisor and this process can take days or even weeks to process the loans with strict requirements.
However, over the past few years, We have witnessed significant growth in decentralized finance, allowing users to utilise financial services without relying on a central authority or Third Party. These financial services are provided via decentralized applications built on the Blockchain. One very specific use case that has experienced a great inflow of liquidity since the Decentralized Finance summer in 2020 is Money Markets.
INTRODUCING 0VIX PROTOCOL, DEFI 2.0 MONEY MARKET
0vix protocol is an open-source lending and borrowing protocol enhanced with Ve-tokenomics which aims to provide stable and sustainable yields for polygon users through her native token $Vix.
Similar to other decentralized Finance money markets where users can deposit and supply crypto assets and earn a certain APY, it also provides users with the opportunity to borrow against the supplied digital asset. However, users can only borrow an amount lower than the supplied assets because lending and borrowing in decentralized Finance are over-collateralized, and the main idea behind this is to protect the assets of the lenders.
0vix protocol However has taken the next evolutionary step as a money market protocol as it enables users to effortlessly lend, borrow and earn interests alongside the native $Vix token.
Digital assets depositors supply assets to the protocol and earn passive income while Borrowers can take out funds in an overcollateralized pattern based on a certain Interest rate and the Interest earned by depositing funds can help to compensate for the accumulated interest rates from borrowing. Presently it’s in Beta Phase, any interaction with the platform makes you eligible to claim $Vix token which can be locked in exchange for $Ve0vix which allows users to vote for rewards on the platform.
The 0vix protocol aims to offer crypto loans in a trustless manner while also offering transparency with easier access to crypto assets without involving any third party.
What makes 0vix Protocol Unique?
The 0vix protocol aims to provide users access to to a permissionless money market built on an innovative layer 2 protocol; POLYGON. In order to reduce the barrier of entry for new users Into Decentralized Finance by providing a suite of products on a highly scalable, innovative, and decentralized platform while still benefiting from the security of Ethereum. In doing this, It’s able to focus on adaptability, ease of use, low barrier of entry, and low fees. Simply, anyone with a wallet can have access to the products offered by 0vix protocol as it is open and permissionless with innovations in efficiency, access, and transparency in comparison to Traditional/Centralized Finance.
VE-TOKENOMICS MODEL
A Key Feature of 0vix Protocol is the VE-Tokenomics model. V-E is an acronym which means Vote escrowed, while Tokenomics is a concept that helps us to understand the potential value of a Decentralized Finance protocol by giving careful consideration to all aspects of a token’s creation and management.
The 0vix protocol aims to adopt this model popularized by curve finance to create a more sustainable way to Incentivise users to utilize the platform and create more positive feedback When it comes to what you can do with the $Ve0vix gotten after locking $Vix that was received.
One of the ideas behind the introduction of this model is that it will bring about a competition between Markets that wants to boost their asset yield on 0vix and to get this done, requires users to make a Vote. These markets then will start to compete to influence and Incentivise voters to essentially boost their Yield. There’s an emission schedule of the rewards and the voting for the schedule is only available for those who lock their $0vix to receive $Ve0vix as these Users can influence the rewards schedule. During the Curve Wars, this was referred to as The Curve bribes.
This is also another unique feature absent in most money markets.
DYNAMIC INTEREST RATES
Most money markets experience a jump rate model where there’s a Kink the moment utilization hits a certain level. 0vix protocol, However, introduces a dynamic jump rate interest model that is individual for every asset class with a more gradual increase when there’s excess market volatility, especially with borrowers rate, as they start going up fast.
SUPPORT FOR POLYGON SUPERNETS
Polygon SuperNets are the fast-track for blockchain adoption in the new private and public networks for apps and enterprises alike.
As a truly Innovative money market, 0vix Lending and borrowing platform aims to be the first to support lots of polygon Supernet Chains. These are blockchains that will utilize the polygon “blockchain as a service” solution known as “SuperNets” powered Polygon Edge.
ARE THERE RISKS ASSOCIATED WITH THE 0VIX PROTOCOL?
One of the key elements of the potential risks that can affect the 0vix platform will be exposure to smart contract risks, but this Risk isn’t particular to the 0vix protocol, but it also applies to every Decentralized Finance application. However, in order to effectively protect Users, the 0vix protocol is continuously being tested to mitigate these potential risks.
Another element of risk that comes with Utilizing the 0vix protocol is Liquidation risk. 0vix aims to provide the best user Interface necessary to protect the assets of users from undue loss. Users can also protect their assets from being Liquidated by repaying their loans or depositing more assets to increase their Health Factor which is a necessary instrument in checking how healthy a loan is.
A bug bounty has also been introduced to incentivize a positive analysis of the open-source Code to avoid exploits.
Similarly, it is important to note that every cryptocurrency is exposed to risks and no crypto-assets should be considered 100%
How to get Involved with 0vix;
Website: https://www.0vix.com/
Twitter: https://twitter.com/0vixProtocol
Discord: https://discord.gg/0vix
Telegram: https://t.me/OVIXProtocol
